Sterling surges as May promises parliament vote on Brexit

Theresa May has stressed that UK would stay a key European partner

Sterling jumped on Tuesday by the most since June's Brexit referendum as Prime Minister Theresa May promised a parliamentary vote on Britain's deal to leave the European Union and stressed it would seek to stay a key European partner.

The pound, already up more than one  per cent as May began to deliver a keenly-awaited speech that had been extensively leaked to media, surged two per cent on the day to reach $1.2278 at its peak.

It also gained around 0.8 per cent to 87.36 pence per euro, reflecting a broader sell-off in the dollar globally driven by concerns over Donald Trump's presidency.

The FTSE 100, which has tended to rise as sterling falls, extended an early drop led by exporters and mining companies as May spoke.

Gilt yields, which have been falling as expectations for future UK growth suffered from concerns over Brexit, rose around 2 basis points to 1.275 per cent for 10-year paper.